American Airlines' parent company posted a narrower loss of US$529 million in the fourth quarter, boosting its losses for the full year to more than US$3.5 billion, an industry record.
The world's largest air carrier blamed continued fear over terrorism and possible war in Iraq as well as costly fuel and a lackluster economy on the latest shortfall.
But its loss for the quarter was smaller than analysts expected.
American Airlines' parent AMR Corp said it lost US$3.39 per share for the three months ended Dec. 31 compared with a net loss of US$798 million, or US$5.17 per share, a year earlier.
Revenue rose to US$4.19 billion from US$3.80 billion a year earlier.
Analysts surveyed by Thomson First Call expected AMR would lose US$3.73 a share for the quarter.
The company lost US$3.5 billion last year, or US$22.57 per share, compared with a 2001 net loss of US$1.8 billion, or US$11.43 per share. Revenue fell to US$17.3 billion from US$19 billion in 2001.
For Fort Worth-based American, which is losing millions of dollars each day and must borrow to meet payroll, such financial results are "unsustainable," said Don Carty, AMR chairman and chief executive.
"While there are many factors that impacted our results during 2002, including a sluggish economy, high fuel prices, lingering concerns over terrorism and the possibility of a war in the Middle East, the core issue for our company remains a cost structure that is out of step with the revenue environment facing domestic airlines," Carty said in a statement.
"As we've been discussing with our employees, we believe that a permanent shift has occurred in the airline revenue environment which will require us to reduce our annual costs by at least four billion dollars," he said.
Airline executives say they have only been able to identify about half of those savings by cutting flights, mothballing planes and laying off employees. The carrier has reached out to unions representing pilots, flight attendants and other employees, with Carty saying restructuring of labor agreements is also a key to renewed profitability.
American, Carty has said, does not plan to follow United, the world's second-biggest airline, which has filed for Chapter 11 bankruptcy protection.
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